Go Big or Go Home – Americans Now Have the Highest Credit-Card Debt in History

Steps Borrowers Should Take in a Credit Card Lawsuit

A Federal Reserve report from earlier this month indicated that as of June of 2017 Americans have $1.021 trillion in outstanding revolving credit. Revolving credit is a type of credit that can be used repeatedly up to a certain limit as long as the account is open and payments are made on time. With revolving credit, the amount of available credit, the balance, and the minimum payment goes up and down depending on the purchases and payments made to the account. One of the most common types of revolving credit is credit cards.

In recent years the revolving credit industry has experienced an annual growth rate of 4.9%. According to TransUnion, a credit reporting agency, more than 171 million consumers had access to credit cards backed by major banks in the first quarter of 2017. One of the primary factors for this is that lenders are allowing consumers with sub-prime, or below average, credit scores, to have access to credit. 16.3 million of the 171 million of the consumers that used credit cards are categorized as subprime borrowers. The lenders are closely monitoring these borrowers. Additionally, these lenders have indicated that they are providing lower spending rates for these borrowers that are higher at risk. Time will obviously tell the effectiveness of these precautions.

Due to this increased growth and further deepening of debt, it is likely that there will be an influx of lawsuits for alleged nonpayment of credit card accounts. Thousands upon thousands of credit card lawsuits are filed every day in state courts throughout the county. While state laws may differ with respect to defenses available to borrowers, there are some steps that can be taken by a borrower situated anywhere in the United States in order to protect their rights.

First, the worst thing a borrower can do is nothing. Again, the worst thing the borrower can do is bury their head in the sand. The credit card lawsuit industry is hoping more than anything to get a default against the borrower. Several studies conducted have indicated that the majority of credit card lawsuits result in the entry of a default final judgment against the borrower. By getting defaulted the borrower has admitted all of the well plead allegations of the complaint and now has a judgment against them that can be recorded and collected upon for many future years. Many borrowers that do bury head in the sand all of a sudden wake up one day to having their paycheck garnished for a judgment that has been increasing for years due to attorney’s fees, penalties, and post judgment interest. In these unfortunate circumstances, the borrower ends up paying significantly more on the alleged debt than they would of if they had adequately defended the action.

Second, if you are served with a lawsuit understand that you need to read all of the documents in the lawsuit carefully. Often times the lawsuit will contain a pre-trial hearing that the borrower must attend in person, failure to do so can result in the entry of a default judgment. Further, if you are in Florida understand that you have twenty (20) days from the date of receiving the lawsuit to either file with the court your defenses to the action or retain an attorney to do so. It is always recommended that borrowers seek immediate legal advice if they have been served with a lawsuit. Borrower’s often times try to represent themselves, they engage in what they think is nice conversation with the Plaintiff’s attorney, only to find out down the road that the information was being used against them.

Third, review the claims that have been asserted against you. Credit card lawsuits often times contain claims of quantum meruit, unjust enrichment, account stated, and breach of contract. Review the claims asserted against you, the amount that the Plaintiff is seeking against you, and any supporting documentation regarding the claims. Including account statements and credit agreements. Determine if this is actually your debt, often times names and/or account information gets mixed up and the Plaintiff ends up filing a lawsuit and serving the wrong person.

Fourth, review your credit report to determine if there are any other delinquent accounts. If there are delinquent accounts then you will need to determine how to address them with counsel. If there are accounts listed that you do not recognize then you will need to dispute them accordingly.

Fifth, retain counsel. Experienced counsel will almost always save you money in the long run. They will know the available defenses, whether you have any affirmative claims against the Plaintiff or lender that can be potentially used as leverage in negotiations, and whether you will need to seek a negotiated resolution of the alleged debt.

Brendan A. Sweeney, Esq., of Sweeney Law, P.A., The Florida Debt Warrior, regularly represents consumers in defending credit card lawsuits. Brendan A. Sweeney, Esq., has been recognized as a Florida Legal Elite Rising Star Attorney in Consumer Law in 2014, 2015, 2016 and 2017, and is a member of the National Association of Consumer Advocates. If you have any issues with your credit cards, or have a credit card lawsuit, then contact Sweeney Law, P.A. at 954.440.3993 immediately to protect your rights.

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